Correlation Between PT Bank and Keysight Technologies
Can any of the company-specific risk be diversified away by investing in both PT Bank and Keysight Technologies at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining PT Bank and Keysight Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Rakyat and Keysight Technologies, you can compare the effects of market volatilities on PT Bank and Keysight Technologies and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in PT Bank with a short position of Keysight Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Keysight Technologies.
Diversification Opportunities for PT Bank and Keysight Technologies
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BYRA and Keysight is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Keysight Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keysight Technologies and PT Bank is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on PT Bank Rakyat are associated (or correlated) with Keysight Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keysight Technologies has no effect on the direction of PT Bank i.e., PT Bank and Keysight Technologies go up and down completely randomly.
Pair Corralation between PT Bank and Keysight Technologies
Assuming the 90 days trading horizon PT Bank Rakyat is expected to generate 2.15 times more return on investment than Keysight Technologies. However, PT Bank is 2.15 times more volatile than Keysight Technologies. It trades about 0.01 of its potential returns per unit of risk. Keysight Technologies is currently generating about 0.02 per unit of risk. If you would invest 31.00 in PT Bank Rakyat on September 12, 2024 and sell it today you would lose (4.00) from holding PT Bank Rakyat or give up 12.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Keysight Technologies
Performance |
| Timeline |
| PT Bank Rakyat |
| Keysight Technologies |
PT Bank and Keysight Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Keysight Technologies
The main advantage of trading using opposite PT Bank and Keysight Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Keysight Technologies can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Keysight Technologies will offset losses from the drop in Keysight Technologies' long position.| PT Bank vs. Constellation Software | PT Bank vs. AIR PRODCHEMICALS | PT Bank vs. Mitsui Chemicals | PT Bank vs. PSI Software AG |
| Keysight Technologies vs. HEXAGON AB ADR1 | Keysight Technologies vs. Superior Plus Corp | Keysight Technologies vs. SIVERS SEMICONDUCTORS AB | Keysight Technologies vs. NorAm Drilling AS |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.
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